1 STAFF REPORT
DAT
E: November 14, 2023
T
O: Justin Hess, City Manager
F
ROM: Dawn Roth Lindell, General Manager, Burbank Water and Power VIA: Riad Sleiman, Assistant General Manager, Electric Services BY: Calvin Clark, Senior Electrical Engineer
S
UBJECT: Approval of a n Electrical Service s Agreement with Ranch Lot Studios Owner, LLC for the Ranch Lot Studios Project
RE
COMMENDATION
Approve and authorize the General Manager of Burbank Water and Power (BWP) to Execute the Electrical Service s Agreement with Ranch Lot Studios Owner , LLC (Attachment 1), subject to review and approval by the City Attorney’s Office and execute any other supporting documents to implement the agreement.
BACKG
ROUND
The Ranch Lot Studios Project
Ranch Lot Studios Owner, LLC (the develope r) is planning to redevelop the former Ranch Lot Studios property located at 411 North Hollywood Way . The proposed development will include a five-story office building, 16 sound stages with associated production space, a new mill building, and a 5-level parking garage. The proposed electrical load for the development is 11.231 megavolt-amperes (MVA), with a requested energization date in the first quarter of 2025. This new electrical load triggered a requirement for the developer to build a 69 kilovolts (kV) to 12kV customer substation on the project site.
B
WP operates the Capon Switching Station on the developer’s property on approximately 11,000 square feet (sf) of leased land. This 69kV to 34kV switching station provides service to the entire media district region of Burbank via the Hollywood Way and Keystone distributing stations, as well as the Warner, NBC, and Pointe customer stations. The latest rent for the ground lease in 2023 was $51,500 per year, increasing by 3% per year until the lease expires on December 31, 2031.
DI
SCUSSION
In addition to an on- site customer substation, BWP analyzed the cost and feasibility of providing electrical service to the project from an existing community substation. The developer and BWP agreed that providing service from an existing community substation
WATER AND
POWER
2 would mutually benefit both parties. After several rounds of negotiation, an electrical services agreement was drafted, which captured several key terms, including:
1. The termination of the ground lease and the establishment of a permanent recorded easement for the 11,000 sf that comprises the Capon switching station.
2. The addition of an approximately 4,000 sf recorded easement for future station expansion.
3. The establishment of subsurface easements for existing underground electrical infrastructure as well as associated access easements.
4. The developer’s cost for allocated electrical capacity from existing community substations.
5. The developer’s cost for extending 12kV distribution facilities to the project site.
Benefits to the Developer
Contributing to a community substation lowers the developer’s total costs . In addition, it frees up about 15,000 sf of on the property that would otherwise be needed for a customer substation.
Benefits to BWP
For BWP, eliminating the ground lease for the Capon switching station, which is set to expire at the end of 2031, ensures long- term access to that substation, which still has approximately 30 years of usable life remaining. This assurance carries significant financial benefits for BWP and its ratepayers, as relocating this switching station could potentially incur costs ranging between $40 million to $50 million. Moreover, the establishment of a permanent easement will generate cost savings for BWP by putting an end to all future lease payments.
Furthermore, adding a 4,000-square-foot easement will prove advantageous if the Capon switching station site is repurposed for other uses in the future. Lastly, extending 12kV distribution facilities to the project site will enable BWP to replace several deteriorated and undersized underground assets while creating alternative pathways for the underground 12kV distribution network.
ENVIRONMENTAL REVIEW
The electrical services agreement does not involve any material physical change to the existing substation or the surrounding area. This activity has no potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378. The extension of the new underground 12kv distribution lines was separately approved under the development agreement. To the extent of any material modification or expansion of the substation, such modification or expansion will be submitted to the City Council under a separate staff report with the applicable environmental review analysis.
FISCAL IMPACT
As part of the electrical servic es agreement, the developer would pay $ 6,873,552 for allocating 11.231 MVA of electrical capacity from existing community substations . The 3 developer would also be responsible for 100% of the cost of extending new underground 12kV distribution lines to the project site, which is estimated to cost approximately $7,250,000. Establishing a permanent easement would allow the city to avoid $471,694 of remaining lease payments.
The developer has already paid a portion of the aid- in-construction (AIC) payments to perform initial engineering and, with the execution of the electrical services agreement, will pay subsequent installments based on project milestone dates. These are considered off-site charges, and additional AIC payments will be collected for all other on-site work.
The cost for this work has been budgeted in BWP’s capital budget in fiscal years 2023- 24 and 2024-25.
CONCLUSION
Staff recommends the approval of the electrical services agreement and authorization for the General Manager of BWP to execute the electrical services agreement with the developer and any other ancillary documents to implement the foregoing agreement.
Proceeding with the proposed electrical service a greement will mutually benefit the developer, BWP, and its ratepayers. This agreement will ensure longer-term access to the Capon switching station, which still has at least 30 years of life left. Additionally, this agreement will allow BWP to recoup the cost of the existing 12kV substation capacity, expand on the substation site in the future, and replace aging and undersized underground assets at the developer’s cost.
ATTACHMENTS
Attachment 1 – Electrical Services Agreement